Nvidia stock and other major semiconductor stocks wobbled Thursday after Wednesday's brutal tech-stock sell-off. Chip stocks fell in morning trades, turned positive midday, but ended the session lower.
The Philadelphia semiconductor index dropped as much as 3.9% in morning trades on the stock market today. However, in early afternoon trades, it was up 1.2% for the day. But it soon reversed and ended the session down 2%.
On Wednesday, the index, known as SOX, plunged 5.3%. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
Shares of artificial intelligence chip leader Nvidia plunged as much as 7% in morning trades Thursday. But Nvidia stock has bounced back and was up 2% at one point. However, it ended the session down 1.7% to 112.28.
On Wednesday, Nvidia stock plummeted 6.8% and closed beneath its 50-day moving average line, a key support level.
Semiconductor stocks falling on disappointing earnings reports Thursday included MaxLinear and STMicroelectronics. MaxLinear stock cratered 37.1% to 14.02. STMicro shares tanked 15.4% to 33.47.
'Buying The Dip' Is Risky Move
"Semis and much of large-cap tech got way overbought end June and first half July (in) my view and what we are seeing is an unwind of that froth," Jordan Klein, a trading-desk analyst with Mizuho Securities, said in a client note.
As tech stocks wavered on Thursday, Klein said he's staying on the sidelines for now. His "core favored buy-and-holds" in semiconductor stocks include Nvidia, Broadcom and Taiwan Semiconductor Manufacturing.
"It feels too early to be buying the dip in semis," he said. "Just so much 'tourist and generalist' investor money to come out. They do not know what they own, so sell first and ask questions later when the charts break down and the momentum trade ends."
Nvidia Stock, Others On Tech Leaders List
Quarterly reports for semiconductor stocks have been mixed so far this earnings season. Taiwan Semi and Impinj delivered beat-and-raise reports. And Texas Instruments posted in-line results and guidance.
But MaxLinear, STMicro and NXP Semiconductors saw their shares tumble on weak guidance for the third quarter.
The bulk of second-quarter earnings reports are due next week. Companies reporting results in the week ahead include AMD, Arm Holdings, Intel and Qualcomm.
Nvidia stock is on the IBD Tech Leaders list as are AMD, Arm and Qualcomm.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
